The9 (ticker: NCTY) focused on WoW rollout (1Q05 conf call)

The9 (ticker: NCTY) an online game operator and developer in China announced Q1 2005 results yesterday. Here are some key points from the company's earnings results conference call:

On its New Online Game "World of Warcraft" (WoW)

• Aggressively preparing for WoW rollout.
• Started open beta on April 26th.
• Launching commercially in June 2005. Will announce details soon.
• 500,000 peak concurrent users.
• WoW peak concurrent users remain stable because number of users has hit the limit of The9's capacity.
• Accelerating 4th server site to accommodate more players.
• 5th server likely not much after commercialization.
• User card priced at RMB 45 cents per hour. No plans to change pricing.
• Open beta has been so successful that confident can maintain pricing.
• Co-marketing agreement with Coca-Cola (ticker: KO) for WoW starting in June 2005 until the end of the year.
• Details of agreement to be released soon.
• Expect agreement to boost popularity of WoW in 2nd and 3rd tier Chinese cities.
• Already closed down 20,000 accounts that were using cheating tools.
• 70% of computers at Internet cafes capable of running WoW.
• In first week of WoW, noticed a decrease in usage of other major online games in China.
• But don't know where WoW players are coming from.

Other Points of Interest

• China's online game market is making major transition from 2D to 3D games.
• Management confident that The9 is well prepared for this transition.
• Other 3D games in pipeline.
• Adversely affected by delays related to MU.
• MU peak concurrent users fell.
• MU upgrade planned for June.
• ARPU decreased due to increased play using unlimited playing cards for MU.
• Believe increasing cannibalization of other games in the market especially 2D games.
• No timing of Blizzard's release of Battleground game.
• JJW - Open beta test in Q3. Commercialization in Q4.